Saturday, 30 May 2009

Factory output in April rose 5.2 per cent on the previous month, the fastest monthly jump in more than half a century and far above market expectations for an increase of around 3.3 per cent, the trade ministry said...

Manufacturers forecast that output may rise 8.8 per cent in May and 2.7 per cent in June, raising hopes for a rebound in Asia's biggest economy.

Other data on Japan weren't so positive though.

Japan's seasonally adjusted unemployment rate rose to 5.0 per cent in April from 4.8 per cent in March - the highest since November 2003, said the Ministry of Internal Affairs and Communications...

Separate data showed there were only 46 job offers for every 100 job seekers - matching the worst ever figure in June 1999.

Average monthly household spending dropped by 1.3 per cent in real terms in April from a year earlier, falling for the 14th consecutive month...

Japan's core consumer prices fell 0.1 per cent in April from a year earlier after a 0.1 per cent drop in March, which was the first fall in 18 months.

Meanwhile, India appears to be shrugging off the global economic recession, its GDP growing 5.8 percent in the three months to March, beating forecasts of 5.0 per cent growth.

Confidence among U.S. consumers rose this month to the highest level since September...

The Reuters/University of Michigan final index of consumer sentiment increased to 68.7, higher than anticipated, from 65.1 in April...

And first quarter GDP has been revised upward.

The Commerce Department also reported today that the economy shrank at a 5.7 percent pace in the first quarter, less than the government estimated last month. Following the 6.3 percent pace of decline in the last three months of 2008, the drop capped the worst six-month performance in five decades.

But a regional report turned down in May.

... The Institute for Supply Management-Chicago Inc. said its business barometer decreased to 34.9 from 40.1 in April; readings below 50 signal a contraction...

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index ticked up to a 30-week high of 111.9 for the week ending May 22 from 111.0 the prior week, which was revised lower from 111.1.

The index's annualized growth rate surged to a 43-week high of negative 9.3 percent from last week's rate of negative 11.5 percent.

Friday, 29 May 2009

Evidence of a bottoming in the US economy continues to accumulate. From Bloomberg:

Durable-goods orders hovered near a 13-year low and the number of Americans collecting unemployment insurance reached a 17th straight record, offering no sign of an imminent rebound from the worst U.S. recession in half a century.

Orders rose 1.9 percent in April after a 2.1 percent drop in March that was more than twice as large as previously estimated, the Commerce Department said in Washington. Meanwhile, the Labor Department said 6.79 million people are collecting jobless benefits...

Sales of new houses increased 0.3 percent in April to an annual pace of 352,000, Commerce also reported...

An index of executive and consumer sentiment in the 16 nations that use the euro increased to 69.3 from 67.2 in April, the European Commission in Brussels said today. The May reading was the highest since November and was above the median estimate of 69 in a Bloomberg survey of 26 economists. Consumers’ price expectations, which turned negative for the first time on record last month, fell to the lowest since at least 1990.

Thursday, 28 May 2009

Wednesday provided a bit more hope that the US housing slump is easing. From Bloomberg:

Home resales in the U.S. rose for the second time in three months in April as foreclosure auctions and cheaper prices spurred bargain hunters, buttressing the case for an end to the industry’s slump this year.

Purchases increased 2.9 percent to an annual rate of 4.68 million, in line with forecasts, from 4.55 million in March, National Association of Realtors figures showed in Washington. The median price slumped 15 percent from a year earlier, the second-biggest drop on record. A separate report indicated that the slump in home values eased in the first quarter.

Japan’s export slump moderated in April, helping the country post an unexpected trade surplus and adding to signs the worst recession since World War II is easing.

Shipments abroad fell 39.1 percent from a year earlier, after dropping 45.5 percent in March and a record 49.4 percent in February, the Finance Ministry said today in Tokyo. From a month earlier, exports rose 1.9 percent, a second straight gain.

And confidence is rising in several major European economies. Again from Bloomberg:

French consumer and manufacturer confidence rose in May and optimism among Italian executives held at the highest in more than year on expectations the worst of the recession is over.

French manufacturing confidence gained for a second month, while consumer optimism advanced to highest in 13 months, Insee, the national statistics office said. In Italy, household confidence matched the April reading, the highest since December 2007, the country’s national statistics institute reported.

Friday, 22 May 2009

The US economy continues to show increasing signs of an end to the recession. Bloomberg reports:

The index of U.S. leading economic indicators rose more than forecast and a manufacturing gauge improved in signs the deepest recession in five decades could end later this year.

The Conference Board’s leading gauge increased 1 percent in April, the biggest gain since November 2005, the New York-based group said today. The index points to the direction of the economy over the next three to six months...

For the first time since the recession started in December 2007, the change in the leading index over the last six months, on an annualized basis, surpassed the year-over-year measure as both improved. That also happened before the end of the previous two recessions.

The factory industry’s contraction in the Philadelphia region slowed as shipments and employment improved, the Federal Reserve Bank of Philadelphia said in its report...

The Philadelphia Fed’s general economic index climbed to minus 22.6 this month from minus 24.4 in April, the bank said today. Negative numbers signal contraction...

Initial jobless claims fell by 12,000 to 631,000 in the week ended May 16, from a revised 643,000 the prior week that was higher than initially estimated, the Labor Department said today in Washington. The total number of people collecting benefits rose to 6.66 million, a record reading for a 16th straight week, and a sign companies are still not hiring.

Europe also revealed signs of improvement on Thursday. The Markit flash euro-zone composite PMI rose to an eight-month high of 43.9 in May from 41.1 in April. The services index rose to 44.7 from 43.8 in April and the manufacturing index rose to 40.5 from 36.8.

Thursday, 21 May 2009

Japan's economy fell at a record rate in the first quarter of this year. Bloomberg reports:

Japan’s economy shrank by a record last quarter as exports collapsed and consumers and businesses slashed spending, a decline that probably marked the low point in the country’s worst recession since World War II.

Gross domestic product fell an annualized 15.2 percent in the three months ended March 31, following a revised fourth- quarter drop of 14.4 percent, the Cabinet Office said... The economy contracted 3.5 percent in the year ended March 31, the most since records began in 1955...

GDP fell 4 percent on a non-annualized basis...

Weaker domestic demand was the biggest contributor to the decline, shaving 2.6 percentage points off GDP, the most since 1974. Net exports -- the difference between exports and imports -- was responsible for 1.4 percentage points of the drop.

But the economy could already be stabilising.

Still, reports in the past month suggest the world’s second-largest economy may grow for the first time in a year this quarter, albeit from a low point, as exports stabilize and Prime Minister Taro Aso’s 15.4 trillion yen stimulus plan, announced in April, takes effect.

Wednesday, 20 May 2009

Housing starts unexpectedly slid 13 percent to an annual rate of 458,000, led by a 46 percent tumble in multifamily starts, which tend to be more volatile, Commerce Department figures showed in Washington. Building permits, a sign of future construction, fell 3.3 percent to a record low of 494,000.

But there was good news in the underlying data.

Construction of single-family homes rose 2.8 percent to a 368,000 rate, today’s report showed, the second straight monthly gain. Work on multifamily homes, such as townhouses and apartment buildings, plummeted to an annual rate of 90,000 from 167,000 the month before.

The rise in single-family home construction looks more consistent with Monday's report from the NAHB. From Bloomberg:

Confidence among U.S. homebuilders in May increased to the highest level since September, providing further evidence that the housing slump that started in 2006 may be closer to a floor.

The National Association of Home Builders/Wells Fargo index of builder confidence rose to 16 from 14 the prior month, the Washington-based NAHB said today, capping the first back-to-back gain since February 2008...

Another confidence index, this time of German investors, also improved in April. Bloomberg reports:

German investor confidence rose more than economists forecast to a three-year high in May after stock markets rallied and data signaled the worst of the recession may have passed.

The ZEW Center for European Economic Research said its index of investor and analyst expectations, which aims to predict economic developments six months ahead, increased to 31.1 from 13 in April. Economists expected a jump to 20, according to the median of 35 forecasts in a Bloomberg News survey.

Monday, 18 May 2009

Japan's economy contracted dramatically in the fourth quarter of 2008 and the first quarter of 2009 but recent reports indicate that the economy may have seen the worst.

The Japanese economy contracted 3.2 percent in the last quarter of 2008 and is estimated by economists to have contracted over 4 percent in the first quarter of 2009.

Reports from last week and today indicate that the economy has performed somewhat better since.

Last week, the Cabinet Office reported that it composite coincident index of business conditions fell to 84.9 in March from 85.2 in February, the smallest decline in eight months. Even better, the leading index rose to 76.6 in March from 74.5 in February, indicating a possible rebound in the near future.

Another report from the Cabinet Office based on the economy watchers survey showed that workers in economically-sensitive jobs have become more confident about the economy. The survey's diffusion index for current conditions rose to 34.2 in April from 28.4 in March. The diffusion index for future conditions rose to 39.7 in April from 35.8 in March. Both indices are now well off their lows of 15.9 and 17.6 respectively hit in December last year.

Today, we learn that Japanese consumers have also become more confident. The Cabinet Office reported today that its consumer confidence index rose to 32.4 in April from 28.9 in March. Based on the index, Japanese consumer sentiment last month was at its highest level in 10 months, having rebounded from a low of 26.2 in December.

So it is quite clear that the Japanese economy is stabilising. It now remains to be seen whether the improvement can develop into a sustained recovery.

Saturday, 16 May 2009

After some disappointments in economic reports earlier in the week, Friday's US data turned out better. Bloomberg reports:

Industrial production contracted the least since October last month and New York’s manufacturing slump eased further in May, signaling the recession’s grip is loosening.

Output at U.S. factories, mines and utilities decreased 0.5 percent last month, less than forecast, after dropping 1.7 percent in March, Federal Reserve figures showed today in Washington. The New York Fed’s Empire state manufacturing index rose to minus 4.6, also beating economists’ estimates...

Consumer sentiment improved for a third straight month in May, a private survey showed. The Reuters/University of Michigan preliminary index of consumer sentiment rose to 67.9 from 65.1 in April. The index reached a three-decade low of 55.3 in November.

Still, the second quarter GDP estimate by Macroeconomic Advisers has now been revised downward. From Real Time Economics:

According to Macroeconomic Advisers‘ GDP tracking estimate, second quarter GDP was on pace to decline just 0.5%, at an annual rate, as recently as Tuesday...

On Friday, following release of April industrial production figures showing lower-than expected vehicle assemblies, second quarter GDP is tracking a 1.3% decline, according to Macroeconomic Advisers.

Friday, 15 May 2009

[T]he Labor Department reported today that seasonally adjusted new claims for unemployment insurance rose by 32,000 for the most recent available week. That bumps the 4-week average to 630,000, up 6,000 from its value the previous week...

Well, if recovery cannot be discerned from the latest US data, it's not apparent in today's European GDP report either. From Bloomberg:

Europe’s economy contracted at a record pace in the first quarter as companies cut output and jobs to survive the worst global slump in more than six decades.

Gross domestic product in the 16-member euro region dropped 2.5 percent from the fourth quarter, when it fell 1.6 percent, the European Union’s statistics office in Luxembourg said today. That’s the biggest drop since the euro-area GDP data were first compiled in 1995 and exceeded the 2 percent decline economists expected in a Bloomberg News survey. Inflation held at 0.6 percent in April, a separate report showed.

And while there had been some better numbers from Japan earlier in the week, today's machinery orders report suggests that its economy is likely to continue to struggle. From AFP/CNA:

Japan's core machinery orders, a leading indicator of corporate capital spending, fell by a smaller-than-expected 1.3 per cent in March from the previous month, official data showed on Friday...

The data also showed core machinery orders dropped 9.9 per cent in the three months to March compared with the previous quarter.

Thursday, 14 May 2009

Confidence among Japanese merchants rose to a 12-month high in April, signaling a recession in the world’s second-largest economy may be easing.

The Economy Watchers index, a survey of barbers, taxi drivers and others who deal with consumers, climbed to 34.2 from 28.4 in March, the third biggest jump on record, the Cabinet Office said today in Tokyo.

China’s industrial production grew less than economists estimated in April as electricity output fell and exports tumbled. Retail sales climbed.

Output rose 7.3 percent from a year earlier, the statistics bureau said today, after gaining 8.3 percent in March. That was less than the 8.6 percent median estimate of 20 economists surveyed by Bloomberg News. Retail sales grew 14.8 percent.

Production in the euro region plunged 20.2 percent from a year earlier, the biggest drop since the data series started in 1986, the European Union’s statistics office in Luxembourg said today. The March decline, which followed a 19.1 percent drop in February, was steeper than the 17.6 percent fall economists expected, according to the median of 17 estimates in a Bloomberg survey. From the previous month, output declined 2 percent.

Retail sales in the U.S. unexpectedly dropped in April for a second month, indicating that rising unemployment is prompting consumers to conserve cash.

The 0.4 percent decrease followed a revised 1.3 percent drop in March that was larger than previously estimated, the Commerce Department said today in Washington. Other reports showed companies continued to cut stockpiles as demand slowed, and climbing oil costs pushed up prices for imported goods.

Wednesday, 13 May 2009

The U.S. trade gap widened in March for the first time in eight months, as oil imports jumped and weak overseas demand took a bite out of exports.

The trade gap grew to $27.6 billion in March, the U.S. Commerce Department reported on Tuesday, after shrinking in each of the previous seven months and hitting its lowest level in nine years in February...

U.S. exports tumbled in March to $123.6 billion, after rising for one month in February. The March downturn resumed a trend dating back to July.

There is a positive side to the report.

However, in a sign the U.S. economy could be nearing a turnaround, imports declined at a slower rate, down 1 percent in March compared with a 5.1 percent drop in February and even bigger declines in some preceding months.

The deficit also was smaller than the U.S. government expected when it reported U.S. economic output contracted 6.1 percent in the first quarter.

"Taking account of all information presently available, it is likely that the Q1 GDP decline will be revised from 6.1 percent to 5.7 percent," said Nigel Gault, chief economist at IHS Global Insight.

Reports from the UK also offered some hope for improvement in its economy. Reuters reports:

Manufacturing output recorded its smallest monthly fall in more than a year in March, pointing to a possible end in prospect for the sector's contraction after the worst calendar quarter since records began.

Leading economic think-tank NIESR said there were signs the economy stabilised in April, which along with news of a jump in retail sales and a marked slowdown in house price falls, boosted hopes Britain may be starting to emerge from recession.

Tuesday, 12 May 2009

Japan’s deepest recession since 1945 may be abating, the nation’s broadest indicator of the outlook for the economy showed.

The leading index, a composite of 12 statistics including production, consumer confidence and stock prices, rose to 76.6 in March from a revised 74.5 in February, the first advance in six months, the Cabinet Office said in Tokyo today. The median estimate of 14 economists surveyed by Bloomberg News was for 77.

China’s investment in factories and property surged by more than economists forecast in response to the government’s 4 trillion yuan ($586 billion) stimulus package, countering a deepening slump in exports.

Urban fixed-asset investment climbed 30.5 percent in the four months to the end of April from a year earlier, from 28.6 percent in the first three months, the statistics bureau said today in Beijing. Overseas shipments declined 22.6 percent in April from a year earlier, the customs bureau said...

Imports dropped 23 percent, leaving a trade surplus of $13.14 billion, less than the previous month and a year earlier.

Monday, 11 May 2009

The stress tests conducted by federal regulators on banks in the United States have been completed and the results gave the stock market little reason to stop its recent positive run. Still, neither the economy nor the stock market is necessarily out of the woods yet.

On May 7, the Federal Reserve announced that 10 of the 19 banks examined would need to raise US$75 billion by November based on stress tests conducted under the Supervisory Capital Assessment Program. This is less than what many analysts had feared.

The relatively benign conclusion of the stress tests comes in the midst of a stream of better-looking economic data and reinforces the view that the US economic outlook is improving. For example, on Friday, the Labor Department reported that the US economy lost 539,000 jobs in April, the lowest rate of job loss since October. In addition, the Institute for Supply Management's indices for manufacturing and non-manufacturing activities both increased in April.

Investors certainly appear to be happy with the results of the stress tests. Financial shares led US stocks up on Friday, the day after the announcement of the results. The Dow Jones Industrial Average closed at 8,574.65 for a 2.0 percent gain for the day and a 4.4 percent gain for the week. The Dow Jones is now down only 2.3 percent since the start of the year, helped by the hefty 31.0 percent rally since 9 March. The latter seems to suggest that investors are expecting something like a V-shaped recovery.

Not everyone is sanguine though.

In an article in the Wall Street Journal entitled "We Can't Subsidize the Banks Forever" on 5 May, Matthew Richardson and Nouriel Roubini, professors at New York University's Stern School of Business, wrote that the stress tests "will not mark the beginning of the end of the financial crisis" because the estimates of the losses on US loans and securities by the International Monetary Fund and RGE Monitor imply that "the financial system is currently near insolvency in the aggregate".

Furthermore, the so-called stress tests might not have accounted for a sufficiently adverse economic scenario. "For example, the first quarter's unemployment rate of 8.1% is higher than the regulators' 'worst case' scenario of 7.9% for this same period," they wrote. "At the rate of job losses in the U.S. today, we will surpass a 10.3% unemployment rate this year -- the stress test's worst possible scenario for 2010."

Paul Krugman, who won the Nobel Prize for Economics last year, is also not optimistic. In his 7 May New York Times article "Stressing the Positive", he wrote that "the odds are that the financial system won’t function normally until the crucial players get much stronger financially than they are now". However, he thinks that the US government will not do anything dramatic to recapitalise the banks and will instead hope that the banks can earn their way back to health.

The risk is that this strategy "will turn out to be a recipe for a prolonged, Japanese-style era of high unemployment and weak growth".

Indeed, the experience from Japan shows us that the recent rally in the US stock market is not really unusual in the context of a secular bear market.

"Bear market rallies can be explosive," he wrote. "Japan had four violent spikes during its Lost Decade (33pc, 55pc, 44pc, and 79pc). Wall Street had seven during the Great Depression, lasting 40 days on average."

There is much debate over whether the US economy would fare as badly as Japan and experience its own "Lost Decade". The US does have one advantage over the latter that is not often mentioned: its demographics is not as unfavourable as Japan's was. Japan's population barely grew throughout the 1990s, a situation that was not conducive to economic growth.

Still, as the accompanying chart shows, even within the first three years of the bear market in Japan, the Nikkei 225 index experienced a wild ride. The fluctuations in the US stock market today have been sharper, especially in the past year or so. However, in terms of the magnitudes of the moves -- including that of the latest rally -- they have so far been comparable with Japan's in the early 1990s (for a chart comparing the present US bear market with that during the Great Depression, see "Bear market rallies").

So big stock market rallies are not proof of an impending recovery and the bank stress tests are not proof of a healthy financial system. The latest market rally may have been impressive but it remains vulnerable to an adverse turn in financial and economic conditions.

Stock market investors relieved over the bank stress test results may yet face more tests of their own in the market.

Saturday, 9 May 2009

Payrolls in the U.S. shrank last month by the least since October as employers detected signs the worst of the recession had passed and government hiring stepped up for the country’s next census.

Payrolls fell by 539,000, after a 699,000 loss in March, while the unemployment rate rose to 8.9 percent, the highest level since 1983, the Labor Department said today in Washington. The Commerce Department separately said that wholesalers reduced their supply of unsold goods for a seventh month in March...

Revisions subtracted 66,000 from payroll figures previously reported for March and February.

Friday, 8 May 2009

U.S. stocks slid from a four-month high as declines in financial, telephone and technology shares snuffed out an early rally...

The S&P 500, which has risen 34 percent from a 12-year-low in March, slid 1.3 percent to 907.39 at 4:06 p.m. in New York. The Dow Jones Industrial Average decreased 102.43 points, or 1.2 percent, to 8,409.85... Three stocks fell for each rising on the New York Stock Exchange.

Bonds didn't gain from the stock sell-off.

Treasury 30-year bonds fell the most since February as investors demanded higher-than-forecast yields at today’s auction of $14 billion of the securities with the U.S. slated to sell a record amount of debt this year...

The benchmark 30-year bond yield climbed 18 basis points, or 0.18 percentage point, the most since Feb. 3, to 4.27 percent at 3:58 p.m. in New York, according to BGCantor Market data. The 3.5 percent security due in February 2039 dropped 2 3/4, or $27.50 per $1,000 face amount, to 87 1/8.

The 10-year note yield increased 12 basis points to 3.31 percent, the most in a day since gaining 15 basis points on March 10.

Meanwhile, there were important developments elsewhere in the financial world too.

Jean-Claude Trichet has dragged the European Central Bank into a new era by pursuing direct asset purchases over the objections of Germany’s Bundesbank.

President Trichet yesterday announced the ECB will buy 60 billion euros ($80 billion) of covered bonds, taking markets by surprise after Bundesbank chief Axel Weber had campaigned against such a policy...

... While the bank yesterday cut the rate by a quarter point to 1 percent and called that “appropriate,” Trichet said it is not necessarily at its lowest level. All of the decisions were “unanimous,” Trichet added.

Despite the ECB move, European stocks could not sustain their recent rally. From Bloomberg:

European stocks fell for the first time in six days as Barclays Plc and Lloyds Banking Group Plc said bad loans may soar this year, overshadowing a rally by food and beverage companies...

The Dow Jones Stoxx 600 Index declined 0.8 percent to 206.29. The European benchmark has still rebounded 31 percent since March 9 on optimism the U.S. government’s plan to finance the purchase of illiquid assets from banks will help to pull the global economy out of its first recession since World War II.

Thursday, 7 May 2009

In the US, ADP data indicate that the worst of the recession’s employment losses may have passed. From Bloomberg:

Payrolls fell by an estimated 491,000 workers last month, less than economists forecast and the fewest since October, figures from ADP Employer Services today showed. March’s reading was revised to show a reduction of 708,000 workers, down from a previous estimate of 742,000...

Another report today also reflected a weak labor market. Job cuts announced by U.S. employers rose 47 percent in April from a year earlier to 132,590, led by planned cutbacks at government and non-profit agencies and automotive companies, Chicago-based placement firm Challenger, Gray & Christmas Inc. said.

Europe’s service industries contracted at the slowest pace in six months in April, suggesting the region’s worst recession since World War II is easing.

A gauge of activity rose to 43.8 from 40.9 in March and a record low of 39.2 in February. That’s better than an initial estimate of 43.1 published on April 23. The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates contraction.

Wednesday, 6 May 2009

US service industries joined their manufacturing counterparts in showing improvement in April. From Bloomberg:

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 43.7 from 40.8 the prior month, according to the Tempe, Arizona-based group. Readings below 50 signal contraction...

Real estate, retail and finance companies were three of the seven service industries that expanded last month, according to the ISM report. Eleven industries continued to contract, led by management, agriculture and construction firms...

The ISM non-manufacturing industries index of employment rose to 37 from 32.3 the prior month, and its gauge of new orders climbed to 47, the highest level since September, from 38.8 in March.

The improving data flow recently has boosted confidence among CEOs.

An index of confidence among U.S. chief executive officers climbed in April to 50, the highest level since early 2006, from 25.9 in January, as more company leaders believed the recession will ease, a Business Council survey showed today.

Fed chairman Ben Bernanke largely shares that optimism but is wary of a relapse in the financial system.

“A relapse in financial conditions would be a significant drag on economic activity and could cause the incipient recovery to stall,” Bernanke said today in testimony to the congressional Joint Economic Committee. He highlighted that the economic contraction may be slowing and that the housing market has “shown some signs of bottoming” after a three-year slump.

Tuesday, 5 May 2009

The European Commission has cut its forecast for the eurozone economy. Bloomberg reports:

The economy of the 16 countries sharing the euro will shrink 4 percent in 2009 and 0.1 percent in 2010, the European Commission, the EU executive in Brussels, said today, revising a January estimate for a contraction of 1.9 percent this year. The region’s average budget deficit will swell to 6.5 percent of output next year, when unemployment will rise to 11.5 percent, the commission said...

Euro-area inflation will slow to 0.4 percent this year before accelerating to 1.2 percent in 2010, the commission projected. That follows a report from the commission last week showing consumers expect prices to decline over the next 12 months, the first time the price-outlook gauge has been negative since at least 1990.

However, this downward revision in the forecast comes at a time when reports are showing that the worst may already be over. For example, Bloomberg reports that the contraction in manufacturing is easing.

The recession in Europe’s manufacturing industry eased for a second in April, suggesting the worst may be over.

A gauge of manufacturing activity rose to 36.8, a six-month high, from 33.9 in March. That was slightly better than the initial estimate of 36.7 published on April 23. The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates contraction.

And the US is already reporting some positive economic data. Again from Bloomberg:

Pending sales of U.S. existing homes posted their first back-to-back gain in almost a year in March and construction spending ended a six-month slide, spurring a rally in stocks.

The number of Americans signing contracts to buy previously owned homes jumped 3.2 percent after a 2 percent gain in February, the National Association of Realtors said today in Washington. Construction unexpectedly rose 0.3 percent as gains in commercial and government projects overshadowed a continued drop in homebuilding, Commerce Department data showed.

Monday, 4 May 2009

There was confirmation today of a rebound in China's manufacturing sector. From Bloomberg:

China’s manufacturing expanded for the first time in nine months after declines in export orders moderated and investment surged because of the government’s 4 trillion yuan ($586 billion) stimulus package.

The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 50.1 in April from 44.8 in March, CLSA Asia- Pacific Markets said today in an e-mailed statement. A reading above 50 indicates an expansion.

An official manufacturing index released on May 1 also showed growth, adding to signs that China’s economic recovery is gaining pace and global demand is stabilizing. The Shanghai Composite Index closed 3.3 percent higher, extending its increase this year to 41 percent, and Hong Kong’s Hang Seng Index jumped 5.5 percent.

Other stock markets in the Asia-Pacific region also rose strongly today, according to another Bloomberg report.

The MSCI Asia Pacific excluding Japan Index jumped 4.9 percent to 295.11 as of 6:42 p.m. in Hong Kong, the highest since Oct. 3. The measure has gained 19 percent this year amid speculation the worst of the global recession is over. It sank by a record 53 percent in 2008. Japan’s stock market is closed for a three-day holiday.

Saturday, 2 May 2009

Measures of U.S. manufacturing and consumer confidence last month unexpectedly jumped to their highest levels since the credit crisis intensified in September, indicating the economy is on the mend.

The Institute for Supply Management’s factory index rose to 40.1 from 36.3 in March; readings less than 50 signal a contraction. The Reuters/University of Michigan final index of consumer sentiment jumped by the most in more than two years, climbing to 65.1...

A separate report from the Commerce Department showed factory orders dipped in March after a February gain, suggesting any manufacturing recovery is likely to be gradual.

Friday, 1 May 2009

The jobless rate rose to 4.8 percent from 4.4 percent in February, the biggest jump since 1967, the government statistics bureau said in Tokyo today. Prices excluding fresh food slid 0.1 percent from a year earlier...

Spending by households slid 0.4 percent, capping off the worst losing streak since comparable data were first made available in 1964.

Despite today's reports, however, the Japanese economy may actually bottom soon. From Bloomberg yesterday.

The Bank of Japan said the world’s second-largest economy will resume growing in 2010 after shrinking 3.1 percent this fiscal year.

Gross domestic product will expand 1.2 percent in the year starting April 2010, compared with its January estimate of a 1.5 percent gain, the central bank said in its semiannual outlook today in Tokyo. The current fiscal year’s contraction will be steeper than the 2 percent predicted three months ago.

Japan has been pummeled by a collapse in exports since last September, yet signs are emerging that the worst of the recession may be over. The policy board said the global economy is showing a “leveling out” and Japan will “recover at a moderate pace” from the latter half of this fiscal year...

Governor Masaaki Shirakawa and his board kept the benchmark overnight lending rate at 0.1 percent earlier today and refrained from expanding a program of purchasing corporate and government debt, a policy it has been pursuing to channel funds to companies and spur a recovery.

Yesterday's economic reports had also provided reasons for optimism.

Figures for March indicate the recession is easing. Factory production rose 1.6 percent from February, the first gain in six months... Companies plan to boost output again in April and May as they replenish inventories, the report showed.